The Internal Rate of Return Method Assumes That the Cash

question 73

Multiple Choice

The internal rate of return method assumes that the cash flows over the life of the project are reinvested at the ____.

• A) risk-free rate
• B) firm's cost of capital
• C) computed internal rate of return
• D) market capitalization rate

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Definitions:

Exponentiation

A mathematical operation involving two numbers, the base and the exponent, where the base is multiplied by itself as many times as the exponent indicates.

Division

A mathematical operation involving the process of calculating how many times one number is contained within another.

Multiplication

A mathematical operation that calculates the total of repeatedly adding a number to itself a specified number of times, symbolized by the sign ×.

Evaluate

To assess or examine something thoroughly in order to determine its value or worth.